Buying a home

By Judy Litowitz

Buying a home is one of the biggest steps in your life. Are you ready?

Here is a checklist of things you’ll need to consider:

• SAVINGS – Enough to cover your down payment and closing costs.
• INCOME and STEADY EMPLOYMENT – Current and consistent employment for at least two years. Mortgage payments (including taxes and insurance) should not exceed 28% of your monthly income before taxes.
• INCOME vs. DEBT – Your income must cover your debts (credit cards, auto loans, etc.) and your mortgage. Debts should not exceed 36% of your monthly income.
• SOUND CREDIT HISTORY – Lenders are usually concerned with the most current two-year period. There are also ways to improve your financial picture:

—Savings, even a small amount saved regularly, adds up.
—Design a budget; stick to it, but stay flexible enough to make it work.
—Cut credit card spending. If you can’t buy something with cash, use layaway or wait until you have the cash.
—Get your debt under control. Consolidate high interest loans under one loan with an affordable monthly payment.
—Build a sound credit history. Pay your bills on time. Review your credit report each year. Notify credit bureaus of any special circumstances that are beyond your control.

Start following this common-sense approach, and soon you’ll be in a home of your own!

Related pamphlets are available from Union Plus at (800) 848-6466.